Hyundai Capital America wants to seize eight cars it financed for the former Taconic Kia in Cortlandt Manor.
Picon Auto LLC, the parent company of the Kia dealership, has allegedly delayed paying back loans, failed to pay off the eight cars, denied access to title documents and generally refused to cooperate.
Because the dealership has ceased doing business and motor vehicles can easily be transferred or hidden, Hyundai’s attorney, Kathleen Cavanaugh, argues in a legal memorandum, “it is highly probable that (Hyundai) will never be paid.”
Hyundai sued Picon Auto and several affiliates June 19 in Westchester Supreme Court.
Picon Auto and its lawyer, Aboyoun Dobbs, did not respond to emails requesting their side of the story.
Drew Picon formed Taconic Kia in November 2015. Three years later, he closed the franchise.
When Taconic Kia ceased doing business, according to the complaint, it was automatically in default on a line of credit for financing new and used cars and on a business loan for working capital.
Picon also was required to immediately pay off the portion of the line of credit for each vehicle, when it was sold, leased, traded, destroyed, stolen or lost.
Picon returned all but 17 cars to Kia Motors America, and relocated the remaining cars to Picon’s New Young’s Motors, a Chrysler dealership in Milton, Ulster County.
Hyundai demanded immediate payment of nearly $1.9 million on Dec. 3, including $1.5 million for the line of credit and $375,000 for the business loan.
In March, Hyundai discovered that Picon had sold six cars but not paid off the debts.
Eventually, Picon paid off the six cars and three more. Eight cars were still at New Young’s Motors in Milton.
Hyundai tried to repossess them, according to a court filing, but backed off when Picon’s attorney assured that payments were forthcoming.
On May 29, DataScan, Hyundai’s outside auditor, saw the cars in Milton but were not allowed to review the titles. On June 11, according to an affidavit, DataScan was told that the titles had been removed from the premises so changes could be made showing a new lender.
Picon advised Cavanaugh, according to her account, that Hyundai had agreed to apply funds from a settlement with Kia Motors to the car debts. Picon appeared to be saying, she states, that Hyundai had agreed to release the collateral, even though a large balance remained on the loan.
“Of course, Hyundai Capital would not, and did not, enter into any such agreement,” she said.
Hyundai asked the court for an immediate writ of seizure, claiming imminent danger of losing its collateral, namely, the eight cars.
Supreme Court Justice Gretchen Walsh ordered Picon on June 27 to answer the charges in three weeks.
Meanwhile, Picon must quickly give Cavanaugh information and documents on the status of the car titles, including new loans. The vehicles may not be sold or removed from New York, and any proceeds Picon has from selling the vehicles must be transferred to Cavanaugh’s law firm trust account.
“Disobedience of this order,” Walsh stated, “may be punished as a contempt of court.”